CBN’s Policy Saves N217b From Rice Importation
The capital control policy of the Central Bank of Nigeria (CBN), which excluded 41 items from accessing foreign exchange (forex) at the official window, saved the country N217 billion ($600 million) worth of forex in its first full year of implementation in 2016.
Due to the dogged implementation of the restrictions, according to the bank, the country has also recorded spectacular improvements in domestic production of most of these items as at now. CBN Governor, Godwin Emefiele, who made the disclosure at the 2017 Bankers Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN), in Lagos, last night, said there is a significant fall in imports of rice from several countries as at now.He said Nigeria’s biggest rice exporter- Thailand, lost 99 per cent patronage from 1.2 million metric tonnes to only 784 metric tonnes by the end of 2016, being the first full year of the enforcement of the policy.
The fall in imports have been largely filled by a boost in local rice production, as emerging producers like Labana Rice Mills in Kebbi State are trying to keep pace with demand, now processing 320 tonnes of a rice a day. Also, from Kano State, UMZA rice has expanded its milling capacity substantially to the extent that with the recently recorded bumper paddy harvest, the company today takes delivery of over 100 trucks of paddy rice daily.[CBN Writes Banks, Requests For Accounts Without BVN]
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Meanwhile, the bank chief said with stability in the turn of events, the policy makers may soon begin to mull strategies to ease the 16-month old rate hold, in efforts to further accelerate the recovery process.Monetary policy stance, he said, could change when the fundamentals become supportive, adding that if the pace of disinflation becomes adequate and inflation at predicted levels, the policy committee would begin to see strong justification for an easing of monetary policy.
For Emefiele, the optimism is high that inflation would return to very low double digit or high single digit levels next year, as the socio-economic factors that are driving food inflation are resolved, which would then help to reduce the challenges therein.
“Over the last 12 months, Nigeria’s reserves grew by over $10 billion from just over $23 billion in October 2016 to over $33 billion in October 2017. It is my belief that if we remain resolute with our efforts, policies and actions, we can attain position of about $40 billion by end 2018.
“Today, PIL boasts over 50 multinational clients, including Nestle and Unilever. The company has saved Nigeria $7 million in foreign exchange drawdown over the two years of the policy.“Baton Nigeria has also taken advantage of the policy and is now producing high- quality, competitive toothpicks that is 25 per cent cheaper than their Chinese competition.”
As part of the gains from the policy and in line with an agreement we reached with Unilever, the company, which left the country few years ago, will be commissioning a new Blue Band Factory in Agbara, Ogun State early next month,” he added.